Wealth Formula Podcast

Robert Kiyosaki opened my eyes to the notion of passive multiple income streams 9 years ago and it changed my life. Of course, my dad had been talking about "cash flow investing" since I was born but for some reason I was too dense to figure out what he meant. In the context of Kiyosaki, multiple streams of income has generally been interpreted as investing in real estate. After Rich Dad Poor Dad was published in 1997, a generation of real estate groupies was born! You couldn't help but get excited. You get a few houses or apartment buildings cash flowing, and before you know it, you are financially free, right? For those of you out there actively trying to make this happen, it is a little bit harder than it sounds, isn't it? For one, finding properties that cash flow and won't end up costing you money in the end is actually a lot of work and takes some level of expertise. That's why we have the Wealth Formula Accredited Investor Club-- to help facilitate opportunities and to help you deploy your capital. Beyond finding deals, however, there is also the challenge of not having enough capital to deploy to get you to your financial goals in a time frame that you might find acceptable. A good cash on cash rate of return on real estate is 10-12 percent. Let's break that down. You save $100K and deploy it in an opportunity that yields 12 percent cash on cash. In exchange for your $100K, you get $1K per month. If you are a $100K level investor, that extra $1K per month is probably not going to be enough to free you of your golden handcuffs. You're going to need a lot more capital over time. OR--you could find something that makes you A LOT MORE return on investment than owning real estate. You could invest in a business. Truth be told, I own four cash flowing businesses that account for the majority of my income. I certainly do own plenty of real estate and other assets, but the businesses I own are the assets that throw off the most income by far. To be clear, I consider my businesses cash flowing assets just like my real estate--multiple streams of income does not mean it all has to come from rental homes, or owning notes. Of course, owning businesses is far more volatile and risky than owning apartment building as a general rule. The key to making this strategy work, in my humble opinion, is to have a portfolio of assets with different risk/reward profiles that includes high cash flowing businesses. The problem for most people is that they do not have enough time or the expertise to start a business. There is also an initial capital cost to start or purchase a business that, if you fall flat on your face as an entrepreneur, could result in a painful financial outcome. So, as your Wealth Formula sherpa, I've been on the lookout for ways that you too might be able to participate in business ownership with relatively low financial risk and I think I may have found one. I know a handful of people who have done really well on Amazon over the years so I wanted to present this option to you--one that I might be looking into myself at some point with my eight year old daughter. To discuss the Amazon option, I invited Dylan Frost on this week's Wealth Formula Podcast. Dylan is behind thewholesaleformula.com and will tell you how to create streams of income on amazon that you can automate. Make sure to check it out! Buck

I have said on a number of occasions that Wealth Formula Podcast is NOT a Real Estate Show. So why do we talk so much about real estate? Well, for people who want to grow their wealth, there simply is no other asset class with a better track record and more upside than real estate. The Wealth Formula Principles for Wealth Creation are: 1) Invest in tangible things, not paper. 2) Invest in cash flowing assets preferentially. 3) Invest in things you can understand. Complexity is a tool used by Wall Street to siphon away your profits. 4) Utilize the concepts of velocity (ie. Re-invest quickly) and leverage to increase and amplify your returns. 5) Invest in financial education. If you are reading this, you are already working on principle #5. You can easily put in to play principles #1-4 by investing in real estate. On the other hand, if you are investing in gold, it is hard to cash flow and it is hard to use leverage. That doesn't mean you shouldn't invest in anything that does not follow these five principles. As long as you know the rules, by all means, break them. I break them all the time. I own gold. I own life settlements. There's a reason for them all. But the majority of my investments outside of my businesses are in real estate. And, if you want my opinion, that's what anyone wanting to build wealth over time should have as their PRIMARY investment focus. Of course, it is very important to learn about real estate if you are going to use it as a primary investment vehicle and we certainly talk about it on this show. That said, who better to learn more from about real estate, than the Real Estate Guys themselves! Of course the Real Estate Guys are also known as Robert Helms and Russell Gray—a couple of good friends of mine. Robert was on the show a while back ago talking about a luxury resort in Ambergris Caye, Belize that many of you, through investor club, know about and may even be invested in already. Russ is the other half of that dynamic duo and is our guest on Wealth Formula Podcast this week. Make sure you tune in to learn why Russ thinks you should be investing in real estate now!

I have arrived to Southern California and I am now writing to you from my new office which, for the first time in Wealth Formula Podcast History, is NOT a part of my home. This time away from the show has given me some time to reflect. I do have a lot to say to you myself and sometimes the interview format does not allow me to do that. So, I have made a decision that I will do more podcasts in a format where you can hear from me a bit more. During these episodes, I hope to share with you some of my thoughts not only on financial matters but on mindset. One of the biggest barriers to financial and holistic wealth is mindset. Our mindset in turn, is influenced heavily by what we believe. In this episode of Wealth Formula podcast, I talk to you about how our educational system and conventional wisdom may have created artificial "truths" in our lives and how that might actually be destructive to the way we deal with money. Let me know what you think of the show!

I have arrived to Southern California and I am now writing to you from my new office which, for the first time in Wealth Formula Podcast History, is NOT a part of my home. This time away from the show has given me some time to reflect. I do have a lot to say to […]

One of the biggest barriers to financial and holistic wealth is mindset. Our mindset, in turn is influenced heavily by what we believe.

When I was in high school, I used to BLAST Led Zeppelin on my drive to school. My favorite album was Led Zeppelin IV. My music tastes haven't changed much since then. In fact, my music repertoire pretty much ends 1992--the year I graduated high school. Even '92 is a bit late for most of my favorite music though. My wife, on the other hand, generally likes the newer stuff. But last month, I converted her. I had her watch a documentary on Led Zeppelin and she was hooked. Our theme song for the month became "Going to California" because of our impending move to Santa Barbara. By the time you get this message, I will already have moved. This is the last Wealth Formula Podcast episode recorded in Chicago. For those of you who have been listening to my show from the beginning, you can hear the seeds planted for this move in episode 14--almost exactly one year from today! This week's episode of Wealth Formula Podcast is reflective. If you listen to this episode and episode 14, you will see the power of goal setting in action. I feel very strongly in the idea that you must practice what you preach. If I tell you to take action and ask you why you are not living the life you want, I have to ask myself the same thing. That's exactly what I did and now I am seeing the results of that vision. How about you? What's your ideal life? How are you going to make it happen? Remember, you have to know where you're going before you make a plan to get there. Start by listening to this discussion with Zed Williamson.

Several weeks ago, I sent out a "Weekly Wealth Widget" about BASIC estate planning--the stuff you absolutely have to have to protect your family in case you die. I was amazed at the high percentage of people who did not already have this information. That's downright scary. Listen--no one likes to think about dying much less planning out what happens when you die. Hopefully, you live to be 120 but what if you don't? Do you have young children? What would happen to them without you or without your spouse? Before wealth comes safety and security. Safety and security should be planned with not only the here and now in mind, but also with careful consideration of the worst case scenario. This week's guest on Wealth Formula Podcast is one of our country's foremost experts in both estate planning and asset protection: Kevin Day. So, unless you are 100 percent sure you and your family are covered, DO NOT MISS this show!

I have been on a real anti-conventional wisdom kick lately if you haven't noticed. You see, I think that conventional wisdom in personal finance is a big Wall Street scam! Invest in stocks, bonds, and mutual funds for the long run? Why is that conventional wisdom? Well, who benefits if you continuously dump money into the equity markets? The market MAKERS of course! Make no mistake, conventional wisdom can be manipulated by special interests folks. Just look at the sugar industry. In the 1960s, Harvard Scientists were paid off by special interests of the sugar industry to suppress any link between sugar and heart disease. The result--the food pyramid! The food pyramid showed starchy foods like bread, pasta, and cereal as the BASE of the pyramid--the food you should consume the most. Decades later, this guidance has led to an increase in diabetes, obesity, and coronary artery disease. Like the food pyramid, dependence on the equity markets for the long term will likely have consequences to your financial health--but it will be great for the on going pillage of your money by the market makers. The market makers--ie. Wall Street and their minions, the wealth advisors, make money by taking your money. If you don't put your money in the market, they can't do that. That's why real assets like apartment building investments get labelled "alternative". Alternative doesn't sound very safe, does it? It sounds exotic and well...risky. Who wants to invest in risky stuff when your money manager can get you into a diversified portfolio of stocks, bonds, and mutual funds? Doesn't that sound safer? I could go on all day about this stuff by I will spare you the rant. Instead, I will direct you to this week's Wealth Formula Podcast interview with G. Edward Griffin, author of The Creature from Jekyll Island. If you have never heard of G. Edward Griffin, you need to listen this podcast. Hint: The United States Federal Reserve Bank is neither a government institution nor a bank!

If you haven't figured it out yet, I believe strongly that investing is a team sport. Like team sports, it can be fun and rewarding--especially when you win. I talk to investors in Wealth Formula's Accredited Investor Club all the time and often hear the frustration of those interested in investing outside of the equity markets--they have no idea where to turn. They know they want something different, but they don't know how to start. Does that sound like you? Well, I have spoken about this in the past, but the key is to find your team--or perhaps better to call it a tribe. You need to be around people who you know, like, and trust and you need to be around people who have different skill sets than you do. The power of that kind of tribe is priceless. Most of you are on an island. You are successful and live amongst other successful professionals. However, you do not buy into the conventional wisdom of personal finance that your colleagues believe in so you listen to shows like mine for alternative thinking. That's a great place to start but there is no replacement to get out there and actually meet other people of like mind. The power of tribal investing is perhaps no more evident than in the area of angel investing. Angel investing has created enormous wealth in this country. However, if you don't know what you're doing, you will get raked over the coals. The good news is that tribal investing is alive and well in the area of angel investing and, even if you have no experience at all, might be something in which you too can participate and profit from while having a lot of fun in the process. Make sure to listen to this week's Wealth Formula Podcast as I interview super angel investor David S. Rose to learn how, you too, can be an angel investor!

As many you know, I will be leaving Chicago in August to move to Santa Barbara, CA. For the last 5 years, my family and I have gone to the same beach house every August. It always ends up being the best couple of weeks of the year. So last year in August, I did a podcast from that beach called, "What is your dream and WHY aren't you living it???" It was episode 14. I was in an aspirational mood. We were having a great time again. My little girls were playing on the beach and we were eating great Mexican food every night and falling asleep to the sound of the Pacific Ocean. At one point on that trip, I told my wife it was time--time to stop making this a vacation that we looked forward to every year and to make it our life. She asked me, "Can we really do that?" and I said, "Of course we can. We can do anything we want to do." Of course, what she meant was--could we do it financially? After all, all of my businesses were in Chicago for the most part and I still went into the office at least 2-3 times per week. It was a very logical question. But--in typical Buck form, I just made the decision and decided to worry about the details later. Now, that may sound a little crazy to many of you--maybe even down-right irresponsible right? How can you just make a decision to move before having a clear plan on how to get there? Well, I would actually argue that the way I went about things was the right way to do it. If you decide to go somewhere on vacation, what do you do first? Do you first figure out where you want to end up or do you start the process by looking for airline tickets? Obviously you've got to know where you want to go before you figure out how you are going to get there. Similarly, I just decided that we were going to move and I had a year to figure out how to make it happen. The podcast I did was mid-August last year and we will be moving almost exactly one year to the date. You see, most of the limitations we see in our lives aren't real. We make them up for ourselves and then we believe them. It's a terrible problem that most people have to some degree. The problem is that, if not recognized, these artificial limitations can keep us from meeting our potential or simply being happy. There is no one who knows this better than, this week's guest on Wealth Formula Podcast, Dean Graziosi. He is truly a rags to riches story and he is one of the most inspiring people I have ever met. DO NOT miss this episode! Buck